Yahoo Leaves China, Shuttering Beijing Office

A Yahoo logo is shown on a screen during a keynote address by Yahoo President and CEO Marissa Mayer at the 2014 International CES at The Las Vegas Hotel & Casino on January 7, 2014 in Las Vegas, Nevada. (Ethan Miller/Getty Images)

With the closing of its Beijing research center, Yahoo Inc. has called it a day in China.

The Sunnyvale, California-based Internet giant on Wednesday told its 200 to 300 China team, mostly consisting of engineers, that they will be out of job at the end of the month.

“We are constantly making changes to align resources, and to foster better collaboration and innovation across our business,” said Yahoo in a statement. “Our impacted employees will be treated with respect and fairness through this transition.”

Employees will get at least four months’ worth of compensation, and those who have been with the company for more than three years also have the option of being transferred to branch in the United States, an unnamed employee told Chinese business publication Caixin.

“We will be consolidating certain functions into fewer offices, including to our headquarters in Sunnyvale, California,” Yahoo’s statement read.

Cost Cutting

The layoffs appear to be part of Yahoo’s efforts to streamline operations worldwide in the face of pressure from investors. Last year, activist investor Starboard Value LP demanded that Chief Executive Officer Marissa Mayer slash spending by as much as $500 million.

Yahoo has been struggling to grow revenue since 2008 as it shifts to account for Internet users favoring mobile devices like tablets and smartphones over desktop and laptop computers for web browsing.

Yahoo’s profit for the quarter ending in December fell 52 percent from a year earlier while revenue dipped 1 percent.

In recent months, Yahoo has trimmed workers in its Canadian, India, and Bangalore offices. To date, the Web portal has laid off an estimated 700 to 900 employees. Yahoo employs about 12,500 staff globally at the end of 2014.

Yahoo has been withdrawing from China for sometime. The Web portal sold its Chinese operations to Alibaba Group Holding Ltd in 2005, and stopped offering services to its China users in 2013.

China Pullout

Yahoo joins a growing list of US technology firms that have been pulling out from China in recent years.

Zynga Inc., the social gaming company famous for the popular game FarmVille, shut its Beijing office last month, axing 71 staff.

In December last year, software company Adobe Systems winded up its Chinese research and development arm, while Microsoft said it will close phone factories in Beijing and Dongguan.

Most famously, Google Inc. has partially left China after butting heads with the Chinese regime over censorship and hacking in 2010. Yahoo’s decision to exit China is reportedly not due to governmental pressure or censorship issues, according to the Wall Street Journal, citing an unnamed source.

Unlike Google’s 2010 retreat, however, news that Yahoo is leaving China hardly made any ripples on Chinese social media.

User “Cherry_bomb_s” left a popular remark at the bottom of an article on Yahoo’s exit on Baidu, reflecting on how China’s business environment poses difficulties for foreign enterprises.

“Apart from their own problems, aren’t issues like the nastiness and hidden dangers of the domestic environment the reason?” said “Cherry_bomb_s.” “The idea that domestic companies are world Internet leaders is a joke—but they are the best at plagiarizing.”

“Benin221” from Shanxi Province wrote: “The best companies are all leaving; the second best are retiring. Now we’re left with staring at 404 errors on our screens all day.” The “404 error” is the classic error resulting from a blocked Internet page, courtesy of China’s robust army of censors.

But there was no evidence of a mass outpouring of sadness or grieving, and no reports about crowds gathering outside Yahoo’s offices to leave flowers, as when Google made its exit.